State reviews conflict-of-interest rules

Watchdog panel addresses an issue in play with local agencies

The state Fair Political Practices Commission is considering changing its stance on whether elected officials should vote on their own appointments to stipend-paying boards and commissions.

That issue is central to the case involving Tri-City Healthcare District board member Kathleen Sterling, who is being prosecuted criminally for voting against being stripped of her $100-a-meeting stipend.

The commission’s deliberations are also being closely watched in Carlsbad, where the city council has a longstanding practice of voting unanimously on board appointments.

The FPPC currently says that elected officials should not vote on their appointment to boards that pay members stipends of more than $250 annually because it is a financial conflict of interest. Two city attorneys in Orange County in November sent letters to the FPPC urging the agency to reverse its opinion after a citizen filed a complaint with the commission against an municipal official for such a vote.

FPPC Chairwoman Ann Ravel said that the state’s political watchdog agency is discussing the issue because of Orange County complaint.

“It is the subject of internal discussion,” Ravel said. “I think it is a matter that we will scrutinize and potentially revisit.”

Sterling is facing misdemeanor charges of violating the state’s conflict-of-interest laws for voting in August 2010 against her own censure that, among other things, stripped her of her $100 stipend for attending board meetings. The Watchdog in September found that the charges Sterling faces are rare and that other elected officials had cast similar votes without being criminally prosecuted.

Sterling’s trial is scheduled for January.

Bob Stern, the co-author of the state’s Political Reform Act of 1974 and the FPPC’s first general counsel, said he personally believes that elected officials should not vote on their appointments to boards.

However, he said, if the FPPC drops its objection to elected officials voting for their appointment to stipend-bearing boards, impact Sterling’s case.

“The prosecution doesn’t have to agree with the FPPC, but it certainly doesn’t help their case,” Stern said.

The FPPC has written several advice letters since 2003 that widened its interpretation of conflict-of-interest laws to include stipends that government boards pay to appointed members. The commission cites a state regulation that bars elected officials from participating in a vote that would raise their income at least $250 more than other employees or officials in the same position.

The Orange County complaint was filed in October against an official who voted on his appointment to a board that paid $212.50 per meeting. The name of the official and city are redacted from the complaint.

The Orange County attorneys contend the FPPC’s interpretation supersedes a state law that says government income is exempt from conflict laws. They also argue that the FPPC itself has not been clear on whether the practice constitutes a conflict, citing multiple advice letters from the agency that the attorneys say contradict each other.

“The fact that the Commission has issued so many advice letters in direct conflict with each other and the statute, the prosecution of any complaints filed against our clients would seem to be nearly impossible given the substantial ambiguity caused by the Commission’s regulations and advice letters,” wrote Ash Pirayou, whose firm Rutan and Tucker represents several cities including Anaheim, Irvine and Newport Beach.